Top Story

Sustainability: Meaning Motivates Successful Leaders

What do Bloomberg, Chrysler and Owens Corning have in common with Unilever, Puma and Seventh Generation? To create value, they are all paving new paths towards sustainability by betting on the talent and culture of their organisations. To do that, forward-thinking, sustainable companies need smart, creative, and passionate leaders who cultivate and thrive in a “Culture of Purpose.” In his new book, Christoph Lueneburger, founder of the Sustainability Practice at Egon Zehnder, describes how being sustainable is more of a statement about the DNA of an organisation than about the use of solar power. The very best people don’t want window-dressing policies about composting and charitable donations. They want to see meaning in their work all around them. A culture of purpose can be de-constructed into three building blocks: competencies, traits and cultural attributes. Competencies predict who is good at a particular job. A culture of purpose values change leadership, influential management, goal-oriented targets, commercial drive, and strategic orientation. Traits predict who is likely to succeed in the future. Cultures of purpose require engagement, determination, insight, and curiosity. Cultural attributes shape how people relate to one another and strive for what would be out of reach to them individually. The attributes are at the core of a culture of purpose, energy, resilience, and openness. Recently asked to outline the findings on his book in a Twitteresque summary, Lueneburger said: “Cultures of purpose create value, are talent magnets and they don’t just happen. They’re built.”

Leadership

Surviving the Second Year as CEO

The proportion of CEOs who leave office after two years in “the sophomore slump” is strikingly high, when stakeholders lower their threshold of tolerance and when CEOs grow dejected at the slow pace of change in the organisation. Whether CEOs survive or succumb depends on the confidence they generate through their early moves. A study into the fortunes of almost 400 new S&P 500 CEOs during the past decade identified the factors behind failing and excelling during the sophomore phase. The results are telling: a higher proportion of thriving than ousted CEOs had graduate degrees, but a lower proportion had previous experience as CEOs elsewhere. Successful CEOs tend to have 15 or more years of experience at the company itself and were quicker than ousted CEOs to make bold moves in their first year. They appeared more inclined than ousted top executives to “go for it” — to launch initiatives that were innovative and ambitious yet still realistic in their time lines. In addition, thriving CEOs tended to strike a better balance between short-term and long-term returns.

Functional Leadership

Change leaders: Get rid of the “Four Minute Mile” bias

It was widely believed that humans could not run a mile in less than four minutes. But in 1954 Roger Bannister ran a mile in three minutes and 59 seconds. By 1957, 16 more runners had broken through what once was thought to be an insurmountable barrier. McKinsey research suggests that organisations behave in a similar manner and that half of all efforts to transform organisations fail, either because senior change managers don’t act as role models or because people in the organisation defend the status quo. The research also indicates that executives responsible for transformation projects who address pervasive mind-sets at the outset, are four times more likely to succeed in change efforts than those who overlook this stage. “Four-minute mile” equivalents are wide spread, such as “unattainable growth goals” or “unachievable cost savings” or “in-viable strategic changes.” Bannister, after all, studying in Oxford to be a doctor, had to overcome physiologists’ claims that anyone who tried to run faster than 15 miles an hour would die.

For further insight, read: On your marks, by Philippe Hertig, Zurich, and Greig Schneider, Boston

Practice News

Unite to be safe and perform better

Four years ago the Deepwater Horizon oil rig exploded, killing 11 and spilling thousands of barrels of oil into the Mexican Gulf. A year ago Rana Plaza collapsed in Bangladesh, killing more than 1,100. Human rights and safety do matter, but management often fails to realise that. Big organisations often operate in distinct divisions, and multi-disciplinary issues tend to fall through the cracks. Successful directors for Health, Safety, Environment (HSE) or Operational Eco-Efficiency (OEE) enable their line managers in production to introduce uniform standards in all plants, helping their organisations to become leader in safety standards and to perform better financially. If such a transformation is executed well, safety is not only embedded in the corporate culture but also becomes one of the strategic focus areas of the organisation. Journeys like these can in fact be so successful that the resulting change model may then serve other transformation processes within the organisation.